What do customers really value in buying furniture?
Martti Lindman, University of Vaasa, Finland
Abstract
As value creation is considered the core of constructing new business concepts, understanding
the formation of customer value in a given consumption context becomes topical and forms
the impetus of this study. Customer value which consumers perceive in buying furniture has
been focused on with the emphasis on the identification of value indicators and their stability.
The whole consumption chain with different consumption phases forms the context studied
and indicates that clear customer value patterns exist enabling the development of new
business concepts and/or branding. On the basis of the customers’ self estimation to which
phase they belonged at the moment of the survey made, no significant changes inside the most
highly valued value indicators could be found given the transfer from one phase to another.
Factors creating the most value turned out to be stable while statistically significant
differences could be found regarding less ranked value indicators.
Introduction
Emerging views of business concepts or business models emphasize the value which can be
created for customers (e.g. Schweizer, 2005; Morris, Schindehutte and Allen, 2004; Normann
and Ramírez, 1993). The other side of the coin, the value as customers perceive it is a highly
complicated matter which is deeply anchored into the mental world of customers themselves
(e.g. Sánchez-Fernández and Iniesta-Bonillo, 2007; Khalifa, 2004; Woodruff, 1997). A
number of other things than physical products themselves create value and, besides, are often
much more important than the basically functional value of a given physical product in itself
(e.g. Dutra, Frary and Wise, 2004; Groth, 1994). Customer value can be considered the core
of constructing of new business concepts (Lindman, 2007), implying that, by rearranging the
way of doing business, differentiation becomes possible in the eyes of customers. In this
respect, the management of the whole consumption chain - the entire product experience of
buying and using the product - becomes topical (McMillan and McGrath, 2001). The
underlying view that new business concepts are the means by which one can manage and
avoid competition (e.g. Hamel, 2002; Kim and Mauborgne, 2005), gives rise to the key
question of what customers really value and how this knowledge can be applied in terms of
constructing new business concepts. Acknowledging that value expectations and experiences
can drive consumers’ purchasing behaviour, knowledge of corresponding customer value
turns out to be the core of a successful marketing (e.g. Smith and Colgate, 2007; Woodruff,
1997; Thompson, 1998). This preliminary study aims to enlighten the foreseen management
dilemma by identifying indicators of customer value and their stability across consumption
phases and to define further any consumer value patterns which may emerge. The results are
based on internet survey data yielding almost 2 000 responses in total.
Creating and perceiving value
The question of how to create value and what the concept of value exactly means has been
intensively discussed in the relevant literature. Added value can be created in many ways: a
firm’s product offering, pricing strategy or delivery systems form the overall platform along
which generation of customer value can take place (e.g. Gilmore, Carson, O´Donnell, and
Cummins, 1999). A number of corresponding value creation models have been established to
1
grasp the essence of value creation. According to Khalifa (2004) three categories of models
can be found, namely, value components models, utilitarian or benefit/ costs ratio models and
means-ends models. In the first case, more or less ideal product characteristics underlie the
whole spectrum of value generating factors ranking from delighters to dissatisfiers. The
benefits/costs models by definition imply that customers can make judgments regarding the
price and expected benefits (e.g. Sánchez -Fernández and Iniesta-Bonillo, 2007). Means/ends
models are based on the view that products form the means by which customers pursue
desired ends (e.g. Vriens and Hofstede, 2000). Smith and Colgate (2007) further state that
organizations can create basically four major types of value, namely, functional/ instrumental
value, experiential/ hedonic value, symbolic/ expressive value and cost/sacrifice value.
The foreseen variety of value formation is largely due to the fact that the concept of value has
originally comprised a number of different meanings depending on whether an economic
versus behavioural approach is employed. In the first case, trade and use of goods have
historically formed the basis of value creation and utility (Ramirez, 1999). A further
distinction regards use value indicating the subjective assessment of customers in relation to
their needs and exchange value which is available at the moment of sales (Bowman and
Ambrosini, 2000). Zeithaml (1988) in particular defines value as the overall assessment of the
utility of a product in what has been received and what is given. Correspondingly, certain cutoff points can be seen either in terms of a prior purchasing value or the value which is
constructed later (e.g. Woodruff, 1997). In principle, consumers may apply different attributes
and value base in case they are just starting their purchasing activities and hence search for
proper information and product alternatives. Once the product is bought and used, the actual
experience from the product instead comes to fore implying that a considerable change of the
original value assessment which led to the purchase may take place.
As to the behavioural approach, mental dimensions of human value formation become topical
(e.g. Schwartz, 1992; Maio and Olson, 1995; Higgins, 2006) and imply that a number of
mental images and cognitive representations underlie value creation and the final consumer
purchase and choice (e.g. San´chez, Callarisa, Rodriguez and Moliner, 2006; Bowman and
Ambrosini, 2000; Chernatory, Harris and Riley, 2000). As Woodall (2003) summarizes, value
for customers means possible alternatives which reflect the consumers´ expectations,
perception and experience with regard to using, purchasing or possessing a product.
Accordingly, the whole consumption chain, along which customers search, identify, buy,
deliver and use furniture products becomes the context wherefrom customers derive value,
and is applied here as indicated in Figure 1. In this respect, perceived value is taken as the
basis of customer value analysis of this study. Besides the necessity to investigate the value
Search
value
Shopping
value
Buying
value
Delivery
value
User
value
Realization of consumer expectations
Figure 1. Applied context of customer value
dimensionality along a given product category (Sinha and DeSarbo, 1998), SánchezFernández and Iniesta-Bonillo (2007) state that perceived value presumes an interaction
2
between the consumer and product. This naturally can take place always in the context
defined when customers and products meet, be it then a physical or mental occasion.
Research setting and methodology
In order to identify the essence of customer value, 11 in depth customer interviews and two
confirming ones were carried out under the assumption that natural language which
consumers use in talking about furniture consumption reflects to a reasonable extent the
reality they perceive. Consumers were selected from two local furniture retailers’ records
known to be active in different market segments. The selection criterion was that in minimum
two but no more than six months had elapsed since the last purchase of furniture, given that
besides conventional user experience of furniture, also search, buying and shopping
experience were targeted. Interviewing took place in the homes of the interviewees and was
started simply by asking what the latest furniture buy had been. Thereafter a general
discussion regarding furniture consumption as a whole took place. Fully free protocol was
applied and partners were allowed to participate in the discourse. No time limits were set. The
only facet, which the interviewer took care of during the discourse, was to watch that each
phase as indicated in Figure 1 was discussed. Interviews were recorded and transcribed in
order to identify and analyse which kind of natural phrases and sayings were used in the
context of furniture consumption. Applying also Nvivo software for search purposes, all such
phrases and sayings which indicated clearly some judgment and referred to some value factor
– e.g. “colour is extremely important to me” or “the size of the furniture (sofa) turned out to
be amazingly large” - were all evaluated and listed according to the frequency of occurrence.
In total, over 180 different phrases and sayings of requested types could be identified. After
deleting the phrases which clearly represented the same facet of a given value, a final set of
126 value statements were accepted and developed to a form of a questionnaire. Which value
aspects create value to customers and how they are judged individually were measured
thereafter along a scale of 1-5 (do not value at all – values very much). The measurement took
place via an internet survey which was opened on the websites of four domestic retail chains
operating throughout the country. Any foreseen dynamics of value creation was explored
tentatively by asking the respondents themselves to consider and define at first to which
consumption phase they belonged at the moment they were surfing on the internet according
to a given prescription of each phase. There was no demand to focus and limit oneself just to
those values one might consider most relevant in the phase they selected. Over 1800
acceptable responses, of which 86 % were sent by women, could be collected in summer 2007
forming the basis of the basic statistical analysis. An exploring factor analysis was made next.
While factor analysis can be used as a common statistical tool to reduce the original data into
a smaller and manageable set (e.g. Stewart, 1981), emerging underlying factors can be used as
the basis of analysing which kind of customer value patterns there exist (cf. Minhas and
Jacobs, 1996; Jang, Morrison and O´Leary, 2002).
Results
The ranking order by customer value indicators (% of all responses) and corresponding mean
values by the respondents’ 10 highest and lowest value ratings is presented in Table 1 on the
next page. As it turns out, the quality of furniture delivery forms the most important facet of
3
Table 1. Value indicators by ranking order
The most valued
Those who value very much
%
Mean
value
The least valued
Those who value very much
%
Mean
value
In case of a mistake it is compensated immediately
I receive with certainty what I have ordered
When I buy more I can get a free transportation to home
Materials wear well
The sitting comformatibility is good
The delivery of the products does not take for weeks
The price-quality relation is o.k.
Furniture creates homely athmosphere and comfort
They do not force products in the furniture store
Having the feeling of success in buying the furniture
86
84
76
75
75
74
69
69
67
66
4,8
4,8
4,7
4,7
4,7
4,7
4,6
4,7
4,6
4,6
Furniture represents a certain style
Furniture belongs to a given series
Furniture is fashionable, trendy
I am contacted even after the buying
Furniture looks modern
There are not too many alternatives in the store
Furniture is a well-known brand product
Furniture is the same style as in my child home
Some friend has recommended tought furniture
Furniture has a famous designer
8
7
7
5
5
5
4
2
1
1
2,9
2,8
2,6
2,5
2,6
2,7
2,7
2,0
2,1
2,1
the perceived customer value, indicating that either manufacturers or retailers or both cannot
respond properly to the customer expectations. Besides real delivery problems, one may also
acknowledge that spatial dimensions and assembling demands of furniture create expectations
which refer to the problems of handling the furniture and can explain why free transportation
creates considerable value. As one can expect, certain product attributes create value as well
but, on the other hand, such mental value aspects like “furniture can create homely
atmosphere and comfort”, “they (sellers) do not force products in the store” or “having the
feeling of success in buying furniture” are of great importance too. A number of specific
mental, experiential and/or environmental factors in other words get anchored in the core of
the perceived customer value. On the other hand, most customers do not value or care too
much if a trend or brand product or any famous designer is in question proposing that imagebased factors play so far a minor role in furniture consumption.
The results in Table 2.beneath indicate that over half of the respondents were in the first
phase. This of course is largely due to the fact that in the search phase the need of relevant
knowledge is high and internet offers a proper search tool. A follow-up survey made in
January 2008 indicated more specifically that 67 % of all the surfers involved (N= 2058) visit
the internet daily, 20 % weekly and the rest less frequently. 21 % of all surfers look at
furniture every now and then, 28 % randomly but as much as 46 % of all surfers who plan the
buying of furniture look always at furniture too. One may hence expect that there are always
persons who belong more or less to some other than search phase which is why the selfestimation is considered a reasonable approximation of different phases. The statistical
significances of the main effect of the consumption phases (difference of group means) were
Table 2. Dynamics of value creation by value indicators
Value means by phases of consumption
Value indicator
Search Shopping Buying Delivery
User
I can search proper furniture from many sources
I receive the latest product catalogues
I can search proper furniture via internet
I can buy furniture via internet
The colour of the furniture is just the right one
I can change furnishings all the time
I receive good offers
Furniture pricelevel is advantageous
I recieve all furniture from the same store
There are not too many alternatives in store
I can buy just ordinary furniture
Furniture is practical
Furniture is the same style as in my childhood
I can hobby furnishing
I can dream of new furniture
% in each category
N in each category
4,30
3,98
4,49
2,88
4,43
3,00
3,98
4,16
3,63
2,65
3,87
4,13
2,06
3,42
3,68
58
1039
4,11
3,77
4,36
2,74
4,52
3,01
3,84
4,05
3,42
2,71
3,84
3,97
2,10
3,39
3,67
17
311
4,16
3,89
4,33
2,58
4,52
2,70
3,94
4,01
3,51
2,54
3,75
4,03
1,86
3,26
3,43
12
210
4,04
3,89
4,33
2,78
4,58
3,05
3,86
3,95
3,34
2,47
3,63
3,95
1,93
3,69
3,81
7
121
4,04
3,80
4,15
2,56
4,40
2,67
3,69
4,04
3,62
2,92
4,02
4,13
2,12
3,47
3,66
7
123
Significance
of difference
< 0,001
0,011
< 0,001
0,004
0,043
< 0,001
0,009
0,014
0,009
0,004
0,015
0,037
0,030
0,036
0,042
100
1804
4
determined by one way analyses of variance. None of the customer value indicators having
statistically significant difference between different phases correspond to the ones in Table 1.
proposing that customers are ready to stretch and suffer to a certain extent rather than change
their most important value criteria whatever the demand of change. A further proposal is that
factors which create customer value most are relatively permanent and independent of the
order of consumption phases. There is still the possibility that if not forced the selection of a
single phase cannot in itself activate mentally just those indicators which are most relevant.
Consequently, evaluation may address the whole consumption chain instead of a single phase.
The exploring factor analysis produced originally 24 factors with eigenvalue >1. A further
analysis, more dense factors with acceptable interpretation content as the target, produced a
model of eight factors as indicated in Table 3. Given the minimum loading value of 0.3 and
Table 3. Factor analysis by customer value
Name of
factor
Home cat
Specifier
Shopping fan
Design fan
Status seeker
Everyman
Money saver
Ecologist
No. of incoming
variables
27
26
19
17
11
5
8
5
Loading
range
0,31 - 0,63
0,31 - 0,63
0,34 - 0,68
0,31 - 0,74
0,31 - 0,81
0,35 - 0,57
0,34 - 0,50
0,42 - 0,85
Communality
range
0,29 - 0,65
0,31 - 0,89
0,45 - 0,65
0,46 - 0,75
0,35 - 0,65
0,36 - 0,54
0,33 - 0,50
0,46 - 0,76
Eigen
value
10,2
9,2
7,0
6,2
6,1
3,8
3,6
3,0
Variance Value very much Key words
explained
% of all resp.
8,2
57
Cosiness, warmth
7,4
67
Harmlessness, adequacy, fit
5,7
40
Sales service, store athmosphere
5,0
1
Design, sophistication
4,9
11
Furnishing, social intercourse
3,1
16
Conventionality, easy buying
2,9
29
Price, discounts
2,4
17
Environmentalism, natural material
communality value of 0.3 correspondingly, the highest number of incoming variables by
factor became 27. However, incoming value indicators were in all cases relevant and
understandable, no conflicting statements occurred inside a given factor, and therefore a
credible interpretation of the consumer value pattern each factor represents became possible.
On this basis a detailed value pattern description of each factor was produced and named as
indicated above. As an example only, such value indicators as homely atmosphere, comfort,
easiness or the warmth of furniture in general underlie the consumer value pattern named as
home cat. As can be seen further, some value aspects behind the factors of home cat and
specifier in particular are generic and are shared more or less by over half of the respondents.
Concluding notes
The findings indicate that an analysis of this type can serve as a managerial tool capable of
helping to understand which factors drive customer value in furniture consumption. Clear
customer value patterns occur implying that a number of prospective options for branding,
differentiation and development of new business concepts exist. The results also indicate that
independent of the value which design in general may have as a competitive tool (e.g. Ravasi
and Lojacono, 2005; Drew and West, 2002), there are furniture markets where design has a
minor if not a meaningless role to play.
A number of severe limitations have to be taken into account when extending the scope of the
study. Even if the diffusion of home computers has reached a high level and the internet
forms a common tool as a quick and cost-effective means to collect data, the results are in a
strict sense more or less biased as to the sampling. Especially the fact that so big a proportion
of the respondents are females raises the question where the male respondents are. As to the
dynamics of value creation, a more valid understanding of it would call for a longitudinal
study which covers the same customers from the very beginning up to the end of consumption
chain. Correspondingly, the measurement of value creation should take place phase by phase.
5
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